Two indicted in mortgage fraud

Friday

Aug 31, 2007 at 12:01 AM

SACRAMENTO - A federal grand jury Thursday indicted a Stockton man and another person in an alleged mortgage fraud scheme in which 10 homes were illegally flipped, while charges against a third person have been dropped.

Scott Smith

SACRAMENTO - A federal grand jury Thursday indicted a Stockton man and another person in an alleged mortgage fraud scheme in which 10 homes were illegally flipped, while charges against a third person have been dropped.

Ahmad said through an attorney he denies netting $1.5 million from fraudulent loans taken from 2003 to 2005, as federal prosecutors say.

Attorney Charles Pacheco said he is preparing to take the case to trial.

"My client is adamant that he's not guilty of any of these charges the government is coming at him with," Pacheco said. He added that, like a lot of people, his client bought and sold homes, and the lender was responsible for checking buyers' backgrounds.

In the alleged scheme, Ahmad bought homes and sold them at inflated prices to buyers he created through identity theft or false documents.

Ahmad is accused of secretly making the first few payments on behalf of the fake buyer and then letting the deal foreclose.

Long Beach Mortgage, which is owned by Washington Mutual, is the alleged victim, according to an indictment that is a scaled-back version of the FBI's sweeping affidavit used to arrest Ahmad and two others on Aug. 16.

The FBI affidavit accused Ahmad and more than a dozen others of illegally buying more than 100 Stockton-area homes and netting $8.5 million. Ahmad sent $484,000 to Pakistan, in violation of federal banking laws, the affidavit said.

A Sacramento woman, Manpreet Sing, 24, formerly of Stockton, was also indicted on mail fraud charges stemming from accusations she twice acted as a straw buyer for Ahmad, who paid her $22,300.

Federal prosecutors have dropped charges against a third man, Roberto Ortiz Alfaro, after they questioned him, according to court papers. His attorney, C. Emmett Mahle, said Alfaro, who had a second-grade education, was a victim of the alleged scam.

The FBI affidavit implicates more than a dozen other people in the alleged scheme, including Ahmad's three brothers. The investigation is continuing.

"Mortgage fraud harms not just lenders," U.S. Attorney McGregor Scott said in a written statement. "It harms the larger housing market and poses risks for our regional and national economy."

The maximum penalty for mail fraud involving a financial institution is 30 years in federal prison and up to $250,000 in fines.